• Mon. Feb 26th, 2024

From Traditional to Virtual: Mexico’s Neobanking Revolution Continues to Shape the Future of Digital Banking


Feb 12, 2024
Consolidated institutions backing neobanks as they combat fintechs

The rise of neobanks in Mexico has been meteoric. These digital banks offer a comprehensive range of financial products and services, all accessible through a smartphone. Unlike other virtual financial companies, neobanks have the backing of established banking institutions in the country, such as Santander, Banorte, Banregio, and Invex. This support extends to deposit insurance, which is significantly higher in traditional banks compared to virtual financial institutions.

To qualify as a bank, digital banks must be licensed by the National Banking and Securities Commission (CNBV). Hey Banco, a product of Banregio, is one of the major players in the digital banking space and offers services such as debit and credit cards, personal loans, and high-yield savings. Nu from Brazil has also made significant inroads in the Mexican market and expanded its offerings to include personal loans and savings products.

The success of Hey Banco and Nu has prompted other institutions like Ualá, Invex, Affirme to launch their own digital banking platforms. Even established banks like BBVA and Banorte are entering the digital banking space with their own offerings. These digital banks offer greater deposit insurance compared to virtual financial institutions in case of bankruptcy.

While some traditional banks are focusing on moving all their services to mobile apps rather than launching separate digital banks like BBVA; these businesses view technology investments as critical to their success in the digital age. As we look ahead into the future of Digital Banking landscape in Mexico it’s evident that consumers have more options than ever before for managing their finances – from traditional banks with mobile apps to fully virtual neobanks – reflecting changing nature of financial industry & increasing demand for Digital banking solutions

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